Why are labor unions declining?

Jane Galt asks:

Why hasn’t labour successfully colonised the non-manufacturing world, outside of the public sector?

Read the comments to her post, but I see a few major hypotheses:

1. It is now easier to fire people who try to organize unions.  Remember Reagan and the air traffic controllers?

2. Marginal products are easier to measure and markets are more competitive than in times past.  This lowers the scope for unions as a means of increasing the bargaining power of labor.

3. Physical capital — especially in service sectors — is less fixed than in previous times.  If workers organize, the capital will move to another sector or nation.  In contrast an auto plant is hard to move out of Michigan.

4. Government regulations, and superior market institutions for risk-sharing, render unions less necessary.

5. In the service sector the distinction between "management" and "labor" is more blurred than in traditional manufacturing firms.  Yes you have lawyers and secretaries, but the class of manual laborers who spend their lives with a single firm is smaller than in times past.

It remains a puzzle to me why unions are so strong in Hollywood, suggestions are welcome, I have turned on the comments if you have any ideas on this.


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